Do Your Salespeople Deserve a Raise?

by Paul DiModica

Take The Salesperson Raise Test

There is one key business driver that all growth-directed companies have in common.

• It is not their product or service features and functions.

• It is not their operations, technical or engineering development or delivery capabilities.

• It is not their unlimited access to business funding.

• It is not the strength of their corporate brand.

The key business driver which is shared by growth-directed companies is that they recognize their most valuable asset is the sales and marketing distribution channel.

Everyone reading this article today has lost deals to competitors who out sold you . . . yet your prospect offering was better. Today, more than ever, the strength of your business success depends on the strength of your sales and marketing teams.

Provided to Paul DiModica by eMarketer.com under contract.

Should you pay your salespeople more money? (All of the salespeople reading this article probably just shook their heads "yes.")  Unfortunately, it is a little more complicated than that. In most companies, fully loaded sales costs are 8% to 15% of gross revenue, so arbitrarily raising your sales team's compensation program does not make sense.

Nevertheless, not correctly paying your professional and successful salespeople -- your most valuable business asset -- is bad business. Just because salespeople hit their assigned sales quota does not mean they are professional salespeople. It could be luck, timing, inheriting a gravy account, or perhaps someone's uncle Luwigi is big buyer.

To determine if your sales team members (individually) are professional salespeople and deserve a raise, take the salesperson raise test.

Salesperson Raise Test

1. Does the salesperson cold call at least 20 new prospects per day?
   
   ___Yes         ___No
   
   

2. Is the salesperson's sales forecasts at least 85% accurate month-to-date?
   
   ___Yes         ___No
   
   

3. Does the salesperson invest at least .05%-1% of his/her own annual gross income in sales training programs and seminars (books, teleseminars, audio CD's, etc.)?
   
   ___Yes         ___No
   
   

4. Does the salesperson have a college or university degree?
   
   ___Yes         ___No
   
   

5. Is the salesperson high maintenance and difficult to deal with?
   
   ___Yes         ___No
   
   

6. Is a maximum of 50% of the salesperson's total income derived from his/her base salary or advanced draw?
   
   ___Yes         ___No
   
   

7. Has the salesperson hit at least 95% of his/her assigned sales quota or target for two years in a row?
   
   ___Yes         ___No
   
   

8. Does the salesperson update your corporate customer relationship management system (CRM) or contact manager daily?
   
   ___Yes         ___No
   
   

9. Does the salesperson prepare his/her expense reports on time with all of the supporting detail?
   
   ___Yes         ___No
   
   

10. Is the salesperson's average selling price after negotiation within 10% of suggested retail or original proposal pricing when his/her deals are closed?
    
    ___Yes         ___No

Correct Answers

80% and Above
If you have salespeople who score in this range, you should consider giving them an increase in their sales compensation. These people are sales professionals and treat their career as such. They invest in their own career, they are always near or at their sales quota, and they understand the metrics of being successful salespeople. You cannot afford to lose these business assets and it will cost you more than the raise you do not give them to replace them. In fact, if you have salespeople who score 100% on this test . . . you should OVERPAY THEM.

60% to 70%
These salespeople are strong company assets who are still learning the characteristics needed to become professional salespeople. Strong in some areas and weak in others, they should be monitored for increased company professionalism to see if they can increase their score and merit a raise.

50% and below
These salespeople do not treat their careers in sales as a profession. They may hit their sales targets but that does not make them professional.  Often, these account managers fell into their current sales position and stayed because they like the money and the independence. Account managers who score in this category are half-cycle salespeople and do not deserve a raise.

"Sales is a premeditated sport and professionalism is always premeditated." --Paul DiModica

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